Skip to comments.A Penniless America - Common Cents?
Posted on 07/02/2006 9:52:07 AM PDT by Extremely Extreme Extremist
(AP) PLYMOUTH, Mass. -- In this village settled by thrifty Pilgrims, you can still buy penny candy for a penny, but tourist Alan Ferguson doubts he'll be able to dig any 1-cent pieces out of his pockets.
He rarely carries pennies because "they take up a lot of room for how much value they have." Instead, like so many other Americans, he dumps his pennies into a bucket back home in Sarasota, Fla.
Pity the poor penny!
It packs so little value that merry kids chuck pennies into the fountain near the candy store, just to watch them splash and sink. Stray pennies turn up everywhere: in streets, cars, sofas, beaches, even landfills with the rest of the garbage.
A penny bought a loaf of bread in early America, but it's a loafer of a coin in an age of inflation and affluence, slowly sliding into monetary obsolescence.
For the first time, the U.S. Mint has said pennies are costing more than 1 cent to make this year, thanks to higher metal prices. "The penny is going to disappear soon unless something changes in the economics of commodities," says Robert Hoge, an expert on North American coins at The American Numismatic Society.
That very idea of spending 1.2 cents to put 1 cent into play strikes many people as "faintly ridiculous," says Jeff Gore, of Elkton, Md., founder of a little group called Citizens for Retiring the Penny.
And yet, while its profile of Abe Lincoln marks time in the bottom of drawers and ashtrays, the penny somehow carries a reassuring symbolism that Americans hesitate to forsake.
"It's part of their past, so they want to keep it in their future," says Dave Harper, editor of Numismatic News.
Gallup polling has shown that two-thirds of Americans want to keep the penny coin. There's even a pro-penny lobby called Americans for Common Cents.
The Mint's announcement is a milestone, though, because coins have historically cost less to produce than the face value paid by receiving banks. They are moneymakers for the government.
U.S. Rep. Jim Kolbe, of Arizona, wants to keep it that way. But when he asked Congress to phase out the penny five years ago he failed; he intends to try again this year. If he fails again, he joked recently, he may open a business melting down pennies to resell the metal.
The idea of a penniless society began to gain currency in 1989 with a bill in Congress to round off purchases to the nearest nickel. It was dropped, but the General Accounting Office in a 1996 report unceremoniously acknowledged that some people consider the penny a "nuisance coin."
In 2002, Gallup polling found that 58 percent of Americans stash pennies in piggy banks, jars, drawers and the like, instead of spending them like other coins. Some people eventually redeem them at banks or coin-counting machines, but 2 percent admit to just plain throwing pennies out!
"Today it's a joke. It's outlived its usefulness," says Tony Terranova, a New York City coin dealer who paid $437,000 for a 1792 penny prototype in what is believed to be the denomination's highest auction price.
"Most people find them annoying when they get them in change," he adds. "I've seen people get pennies in change and actually throw them on the floor."
Not Edmond Knowles, of Flomaton, Ala.
No, he hoarded pennies for nearly four decades as a hobby. He ended up with more than 1.3 million of them -- 4.5 tons -- in several drums in his garage. His bank refused to take them all at once, but he finally found a coin-counting company, Coinstar, that wanted the publicity.
In the biggest known penny cash-in ever, they sent an armored truck last year, loaded his pennies, and then watched helplessly as it sank into the mud in his yard. They needed a tow truck to redeem it. "I still got a few ruts in the yard," says Knowles.
His years of collecting brought him about $1 a day -- $13,084.59 in all.
A penny saved was a penny earned for Knowles, but he took another lesson from the experience, too: "I don't save pennies anymore. It's too big a problem getting rid of them."
Another problem: deciding what to make the penny from. Copper, bronze and zinc have been used, even steel in 1943 when copper was desperately needed for the World War II effort. In 1982, zinc replaced most of the penny's copper to save money, but rising zinc prices are now bedeviling the penny again.
"I'm very surprised they haven't gone to plastic," muses Bill Johnson, a wheat-penny collector who owns the Plimoth Candy Co. (It uses an old spelling of Plymouth.)
Even in his shop where a penny still buys a Tootsie Roll, he leaves a few pennies scattered on top of the cash register for customers like Lindsay Taylor, of Westwood, who is buying $1.78 worth of candy.
She is carrying no pennies because her sons have taken them for their old-fashioned piggy banks, which automatically flip coins inside. Her 2-year-old, she says, "just loves pushing the button."
Others have their own reasons for valuing the humble coin, which borrowed its colloquial name from British currency. The "cent" -- meaning 1 percent of a dollar -- has been struck every year except 1815, when the United States ran out of British-made penny blanks in the wake of the War of 1812.
"It's part of the fabric of American culture," says David Early, a spokesman for the government's Lincoln Bicentennial Commission.
The penny took on the profile of President Lincoln, beloved as the Union's savior during the Civil War, on the centennial of his birth in 1909. The first ones carried ears of wheat on the tails side, but the Lincoln memorial has replaced those. Four new tails designs with themes from Lincoln's life are planned for 2009, with a fifth permanent one afterward to summarize his legacy.
This redesign, the first major one since 1959, has heartened penny lovers.
Those who want to keep the penny coin include small merchants who prefer cash transactions, contractors who help supply pennies, and consumer advocates who fear rounding up of purchases.
"We think the penny is important as a hedge to inflation," says director Mark Weller of Americans for Common Cents. "Any time you have more accurate pricing, consumers benefit."
Joining with the lobby, the wireless network Virgin Mobile USA recently launched a save-the-penny campaign. Its penny truck will travel cross-country to gather pennies for charity.
Scores of charities esteem the penny, which many Americans donate without a second thought. Like shouts in a playground, pennies can multiply quickly.
"People don't like carrying them around, so we dump them into the nearest bowl," says Teddy Gross, who founded the Penny Harvest charity drive in New York City schools. "By the end of any given year, most Americans have got a stash of capital which is practically useless, but it's within easy reach of a young person."
Last year, his children raked in 55 million pennies, which had to be redeemed with help from the Brink's security company. They also bagged about 200,000 spare nickels.
By the way, the Mint says nickels are also costing more to produce than they're worth. Pity the poor nickel?
I have several of those 2ft tall 'bottle banks', where I've dumped my pocket change over the years.
The Coke bottle holds 8,990 pennies ($89.90 through the bank's coin counter) and the Rolling Rock bottle holds 8,990 dimes ($890.00) through the same counter. I have a Budweiser bottle that's now filling-up with quarters, and it will be interesting to see how many and what value at cash-in time, its contents yield.
Needless to say, it takes years for those things to fill-up. IMO, the penny is sentimental, but a waste of coinage and space.
The late Mr. Redhead and I saved nickels, dimes, and quarters in a 5-pound jar from protein powder. At the same time, we saved the pennies in a large plastic honey jar. When we went to cash them in, they netted us a cool $1,390 and some-odd cents. Hooray for stashers!
"Stasher" make the world go 'round, Mrs Redhead.
All my change goes into a plastic margarine container on top of my dresser each evening. About once a month it is full to the brim with a mix of pennies, nickels, dimes and quarters. I average between $33 and $36 every time I take it to the bank and convert the coins to cash. Over $400 a year for my "Me" fund. Hedonistic toys that I "want", but do not need. My 2005 Christmas present to myself was a set of Grado SR-325i headphones...
It could have brought him much more if he had regularly brought in a change jar to his bank, and earned interest on his deposits.
Pre 1992 pennies contain about 2.2cents worth of valuable copper and other base metals; the successor penny contains over a cent; foreget about the nickle--it is worth over five cents.
How did it get that way? Very simple--the fed debased the US dollar until the metal in the coins had a greater value than their face value as a share of the dollar.
Time to divide all prices by 100...
Do away with the penny and the nickel. Round everything to the dime.
Judging by the price of a gallon of gas, a dime now has less value that a penny did in 1960.
This is the tried and true method, I believe. He had two containers on his dresser, one for pennies. It didn't get dumped as often as the other coins did, but we always made dumping either one an occasion. "Looks like it's time for a change-dumping ceremony!" Meant we dropped whatever we were doing to go empty the change in the jar. (By the time it was full, it weighed about 40 pounds!)
Who in the heck would be spending pennies and nickels now? As you mention, the pre-82 pennies have over two cents of copper in them. The post-82 pennies were almost at par with their zinc content a couple months ago. Nickels have more than five cents of metal in them.
And now commodity prices are starting to roll again. When hyper-inflation comes these small coins will retain their intrinsic metal value escalating against the collapsing dollar -- and in a worse case scenario would become "small change" for your Silver Eagles or 90 percent.
The nephew regularly "buys" hundred dollar boxes of nickels and twenty-five dollar boxes of pennies from the bank. His reasoning is that he can never lose money on the deal and in a financial meltdown the coinage will hold value better than paper money.
The government is destroying the middle class with the hidden tax of inflation caused by excessive money supply. For a supposedly conservative forum there is very little discussion of hard money economics here.
When it all comes tumbling down you would much rather hold a hundred pennies or twenty nickels than one paper "dollar" of American debt vouchers. Copper and nickel with a bit more substance than paper.
Oh well, you seen one Great Depression then you've seen them all.
They can probably just hold back printing new pennies every year. There will be plenty in circulation for no more of them are used anymore (given increased numbers of businesses now allowing for credit cards so that change is not used at all) and just print reduced amounts of them when circumstances warrant.
Interestingly, in Okinawa, on base, the penny wasn't used. The cost of transporting pennies to Okinawa was/is cost prohibitive, so everything was rounded to the nearest nickel. 9.99 became 10 bucks and 8.72 became 8.70.
Pennies are the only presently circulating "bullion" coin.
As the post above mentions, it's a no brainer to be hoarding pennies and nickels now. You can't lose the intrinsic metal value of them even as the purchasing power of the "dollar" declines -- and you can always spend them in a pinch. Some will tell you that you lose out on "interest" by holding coinage rather than keeping the paper "money" in the bank but most by now should figure that collecting interest at a rate slower than the metal's appreciation is a sucker's game.
It's been awhile since I've posted due to health problems but the illness hasn't kept me from watching the gold price jump up and down and I can tell you now that gold is getting ready to take off again. It's back over 600 now and the billions of dollars the central bankers have thrown away to knock it down for the last six weeks was just another economic piss in the wind.
I was born shortly after my namesake president Harding was elected. Granny said we were so poor that they only had enough ink to write my initials in the family bible so I have been HG ever since. I saw the Great Depression first hand and now that this quack doctor says I'm going to live it looks like I'm going to see another. Because sure as the sun is coming up tomorrow, we are about to have a crash in this country that's going to make 1929 look like a country picnic like we used to have.
I wrote once before how Father coming back from the Great War with gold coins kept us alive during the Great Depression. Of course if he hadn't been such a damn fool and bought all those stocks on margin we wouldn't have lost the city house and had to move to the country. But those gold coins erased a lot of sins in those days and when everybody was wiped out Father still had his gold coins from France.
We ate while others starved.
That thieving dog Roosevelt tried to take everybody's gold and Father just laughed when the subject came up. The other thing he brought back from the war was a Hun Mauser and he knew how to use it and said that anyone that tried to steal his gold would wind up getting lead instead. He called it "reverse alchemy" when he had been drinking a little.
Right now gold is dirt cheap at 600. For about a quarter of that price you can buy a hundred year old British Sovereign or even a German 20 Mark coin like Father acquired in France. If you have extra money do it soon before the price starts going vertical by the end of this year. Gold is one of only two protections the citizen has against central bankers gone mad. If you've read this far you know the other one.
The middle class in America is being destroyed through inflation and it breaks my heart to see what has happened to this great land of ours. Sometimes when Father had been hitting the bottle hard he would start carrying on about British bankers starting the war and getting all his buddies killed in France. When Roosevelt was elected he said it would be the end of America in my lifetime and if I can hang on a few more years I think he will have been proven right.
Start buying gold and silver -- quietly. Shhhhhh .... as another Roosevelt might be right around the corner. The price is low now because the central bankers will do whatever it takes to keep the price down by creating more money and naked short selling gold on paper. But eventually they print so much money that the paper becomes worthless -- when that happens gold and silver have no theoretical upside in paper dollar terms
If you can't afford silver and gold start hoarding pennies and nickels. You won't lose any money and each one saved ultimately is worth more than its paper equivalent.
During this July 4th holiday take a moment or two to think about these things. You might find you have a lot more in common with the Founding Fathers than you think.
Oh not really. We just have a band of status quo addicts who instantly jump on anybody who brings that stuff up.
Try posting a thread sometime. Watch what happens.
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